Enterprise Financial Services (NASDAQ:EFSC) Is Due To Pay A Dividend Of $0.25
Enterprise Financial Services Corp (NASDAQ:EFSC) will pay a dividend of $0.25 on the 29th of March. This payment means the dividend yield will be 2.5%, which is below the average for the industry.
Check out our latest analysis for Enterprise Financial Services
Enterprise Financial Services' Dividend Forecasted To Be Well Covered By Earnings
The dividend yield is a little bit low, but sustainability of the payments is also an important part of evaluating an income stock.
Enterprise Financial Services has established itself as a dividend paying company with over 10 years history of distributing earnings to shareholders. While past data isn't a guarantee for the future, Enterprise Financial Services' latest earnings report puts its payout ratio at 20%, showing that the company can pay out its dividends comfortably.
EPS is set to fall by 12.3% over the next 3 years. However, as estimated by analysts, the future payout ratio could be 23% over the same time period, which we think the company can easily maintain.
Enterprise Financial Services Has A Solid Track Record
The company has an extended history of paying stable dividends. The dividend has gone from an annual total of $0.21 in 2014 to the most recent total annual payment of $1.00. This implies that the company grew its distributions at a yearly rate of about 17% over that duration. We can see that payments have shown some very nice upward momentum without faltering, which provides some reassurance that future payments will also be reliable.
We Could See Enterprise Financial Services' Dividend Growing
Investors could be attracted to the stock based on the quality of its payment history. It's encouraging to see that Enterprise Financial Services has been growing its earnings per share at 5.6% a year over the past five years. A low payout ratio and decent growth suggests that the company is reinvesting well, and it also has plenty of room to increase the dividend over time.
We Really Like Enterprise Financial Services' Dividend
Overall, we think that this is a great income investment, and we think that maintaining the dividend this year may have been a conservative choice. The earnings easily cover the company's distributions, and the company is generating plenty of cash. However, it is worth noting that the earnings are expected to fall over the next year, which may not change the long term outlook, but could affect the dividend payment in the next 12 months. All in all, this checks a lot of the boxes we look for when choosing an income stock.
Companies possessing a stable dividend policy will likely enjoy greater investor interest than those suffering from a more inconsistent approach. However, there are other things to consider for investors when analysing stock performance. As an example, we've identified 1 warning sign for Enterprise Financial Services that you should be aware of before investing. If you are a dividend investor, you might also want to look at our curated list of high yield dividend stocks.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
